Before he turned to the MLM cryptocurrency niche to scam people through, Frank Dilullo ran a Ponzi scheme through his failed Holey Donuts venture.
As part of Chapter 7 proceedings, a court-appointed bankruptcy Trustee sued Dilullo for running a Ponzi scheme.
The Holey Donuts Ponzi scheme saw Dilullo (right) continue to solicit new investors even though he knew the company was insolvent.
As alleged by the Chapter 7 Trustee;
In essence, Dulillo was engaged in a Ponzi scheme, using sales to new investors to pay off, in whole or in part, old investors and himself.
As part of adversary proceedings in the bankruptcy case, the Chapter 7 Trustee filed for Default Judgment against Dilullo.
A hearing on the motion was held on April 17th. The motion was unopposed and so default judgment was granted.
This ruling will see Dilullo pay damages. How much will be determined at a separate hearing, to be held on June 6th.
After Holey Donuts, Dilullo re-branded himself as a California Psychic.
At some point thereafter, Dilullo signed up with BitConnect promoted it through his “Team US Crypto Baller” Youtube channel.
How much Dilullo stole through BitConnect is unclear, but he is believed to have profited handsomely.
After BitConnect collapsed, Dilullo continued to promote similar ICO lending Ponzi schemes.
One such scheme, RibbonCoin, lead to accusations by his former partner that Dilullo was not only promoting lending scams but also running them.
Dilullo claims his former partner reported him to the FBI and Miami Police Department.
Whether regulators are investigating his promotion and involvement in cryptocurrency fraud however is unknown.
When the ICO lending Ponzi niche ran dry, Dilullo renamed his YouTube channel “Crypto Intelligence Report”.
Through Crypto Intelligence Report, Dilullo switched to promotion of “proof of” ethereum-based Ponzi schemes (e.g. Proof of Weak Hands).
To what extent these latest bankruptcy developments will impact Dilullo’s cryptocurrency scamming career is unclear.
As at the time of publication Dilullo hasn’t uploaded a “Crypto Intelligence Report” video for about a week. Previously Dilullo had been uploading to the channel almost daily.